SC Senate panel at USCB to tackle wind, flood insurance rate hikes

Lowcountry residents hit hard by recent wind insurance rate hikes and increases in national flood insurance premiums can discuss their plight at an S.C. Senate panel hearing at 5:30 p.m. Wednesday at the University of South Carolina Beaufort's Hilton Head Gateway Campus.

The S.C. Coastal Insurance Subcommittee will take public comments at a 5:30 p.m. meeting at the University of South Carolina Beaufort's Hilton Head Gateway Campus, 1 University Blvd., Hardeeville. The meeting will be in the Hargray Building, room 156.

At the meeting, state senators and insurance officials will discuss a bill to reduce wind insurance rates and take public questions on the national flood insurance surges that could substantially raise charges for many coastal Carolinians.

Much of the discussion will center around state Sen. Tom Davis' bill to lower wind insurance rates by luring more insurance firms into the state and giving homeowners more information to comparison shop for policies.

"We've seen a disconnect between the risk that insurance companies are assuming and the premiums they are charging," Davis, R-Beaufort, said of insurance rates in the state, which have risen 71 percent in the past decade, according to data compiled by Daryl Ferguson, a retired Beaufort resident who collected statistics on the coast's high home-insurance rates.

"Now, I want the public to tell their stories -- that's where this hearing is geared," he added.

Wednesday's hearing is the second of three public forums hosted by the subcommittee, a subsidiary of the Senate's Banking and Insurance Committee. The next meeting will be in Charleston after Thanksgiving, Davis said.

The bill under discussion would add to insurance changes adopted by state lawmakers in 2007, he said. It calls for the state insurance commission to provide residents with easy-to-understand data about coastal property-insurance rates, including a website that shows comparisons among insurance companies.

In addition, insurance data, such as the number of claims paid, would be shared with consumers and lawmakers to increase accountability.

The bill also would give additional tax credits to insurance companies that write at least 80 percent of their policies along the state's coast, with the aim of increasing competition and driving down prices for homeowners.

"Insurance companies aren't taking into account the unique, concave nature of the state's coast; it's like a catcher's mitt," he said of the coast's shape. "The state's coast has a lower chance of hurricane risk than, say, the Outer Banks. You'd think in a functioning market prices would come down to reflect that reality, but they haven't."

Davis said the bill should be ready for action by January's state legislative session.

The panel also will field questions about national flood insurance rate increases that went into effect Oct. 1, Davis said.

The increases, part of the U.S. Congress' Biggert-Waters Flood Insurance Reform Act of 2012, are aimed at returning the national flood program to solvency by gradually eliminating subsidized flood insurance rates for those in high-risk flood zones.

Payments will increase 25 percent per year for those with second homes or rental units in low-lying areas of Beaufort County, according to the Federal Emergency Management Agency.

The rate hikes hit new homeowners even harder. Those who purchased property after July 2012 are not eligible for the subsidized rates, FEMA says.

Local real estate agents say they've lost some deals after prospective buyers realized the cost of insurance, which jumped as much as $6,000 annually at some properties.

"There's definitely been some sticker shock at the closing table when buyers find out the price of flood insurance policies that may have been different historically," Davis said.

While Davis said the state has no control over federal legislation, he wants to hear from constituents and encourage federal lawmakers, such as U.S. Rep. Mark Sanford, to delay implementing the policy.

Sanford, a Charleston Republican, said earlier this month that he is co-sponsoring a bill to delay the flood insurance reform by at least four years because it "puts the cart before the horse. It allows government to set new premiums now and charge more without disclosure of how they are deriving their new rates."